Tesla’s $1.5 billion bet on Bitcoin may have pumped the cryptocurrency to elastic-snapping new highs, but the same can’t be said for Tesla stock.
The auto giant revealed Monday it spent 8% of its reserves on 43,000 BTC ($2 billion) in January. Bitcoin’s price then quickly soared 20% to clear the $48,000 mark for the first time.
The thing is, Tesla’s share price has dipped 7% since its Bitcoin disclosure. That represents about $50 billion drained from the company’s market value.
Add to the mix crypto’s infamous volatility and folks with skin in the game are questioning whether CEO Elon Musk’s risk-taking has made things a little too hot.
Earlier this week, former Bernstein analyst and Bitcoin skeptic Gary Black offloaded his Tesla shares, tweeting, “$TSLA has always been higher risk, but investing $1.5 billion in Bitcoin makes it more risky.”
Baker Avenue chief strategist King Lip and Brown Advisory’s Tom Graff also reportedly voiced concerns.
Among the names cashing in their Tesla stock is Musk’s younger brother Kimbal.
The restaurateur and Tesla board member this month sold 30,000 shares worth roughly $26 million — although he still has plenty.
However, whether we’re about to see an investor exodus from Tesla might be a moot point for Bitcoin, considering more companies are tipped to follow Musk’s ‘risky’ lead.